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Banking Act 2009

Type Public General Act

Publication 2009-02-12

Last updated 2026-01-19

State In force

Department Statute Law Database

Source legislation.gov.uk

articles Not indexed

Reform history JSON API

(b) if the meeting removing the bank liquidator resolves to disapply paragraph (a), from a time determined by—

(i) the Secretary of State, or

(ii) in the case of a bank liquidator in Scotland, the Accountant of Court.

Disqualification

110

(1) If a bank liquidator ceases to be qualified to act as an insolvency practitioner in relation to the bank, the appointment lapses.

(2) A bank liquidator whose appointment lapses under subsection (1) has release with effect from a time determined by—

(a) the Secretary of State, or

(b) in the case of a bank liquidator in Scotland, the Accountant of Court.

Release

111

A bank liquidator who is released is discharged from all liability in respect of acts or omissions in the bank insolvency and otherwise in relation to conduct as bank liquidator (but without prejudice to the effect of section 212 of the Insolvency Act 1986 as applied by section 103 above).

Replacement

112

(1) Where a bank liquidator vacates office the Bank of England must as soon as is reasonably practicable appoint a replacement bank liquidator.

(2) But where a bank liquidator is removed by resolution of a meeting of creditors under section 109—

(a) a replacement may be appointed by resolution of the meeting, and

(b) failing that, subsection (1) above applies.

Termination of process, &c.

Company voluntary arrangement

113

(1) A bank liquidator may make a proposal in accordance with section 1 of the Insolvency Act 1986 (company voluntary arrangement).

(2) Before making a proposal the bank liquidator—

(a) shall present a final report on the bank liquidation to the liquidation committee,

(b) shall send a copy of the report to—

(i) the PRA,

(ia) the FCA,

(ii) the FSCS,

(iii) the Bank of England,

(iv) the Treasury, and

(v) the registrar of companies, and

(3) A proposal may be made only with the consent of the liquidation committee.

(4) The liquidation committee may consent only if—

(a) it has passed a full payment resolution, and

(b) the bank liquidator is satisfied, as a result of arrangements made with the FSCS, that any depositor still eligible for compensation under the scheme will be dealt with in accordance with section 99(2)(a) or (b).

(5) The bank liquidator must be the nominee (see section 1(2) of the 1986 Act).

(6) Part 1 of the 1986 Act shall apply to a proposal made by a bank liquidator, with the following modifications.

(7) In section 3 (summoning of meetings) subsection (2) (and not (1)) applies.

(8) The action that may be taken by the court under section 5(3) (effect of approval) includes suspension of the bank insolvency order.

(9) On the termination of a company voluntary arrangement the bank liquidator may apply to the court to lift the suspension of the bank insolvency order.

Administration

114

(1) A bank liquidator who thinks that administration would achieve a better result for the bank's creditors as a whole than bank insolvency may apply to the court for an administration order (under paragraph 38 of Schedule B1 to the Insolvency Act 1986).

(2) An application may be made only if the following conditions are satisfied.

(3) Condition 1 is that the liquidation committee has passed a full payment resolution.

(4) Condition 2 is that the liquidation committee has resolved that moving to administration might enable the rescue of the bank as a going concern.

(5) Condition 3 is that the bank liquidator is satisfied, as a result of arrangements made with the FSCS, that any depositors still eligible for compensation under the scheme will receive their payments or have their accounts transferred during administration.

Dissolution

115

(1) A bank liquidator who thinks that the winding up of the bank is for practical purposes complete shall summon a final meeting of the liquidation committee.

(2) The bank liquidator—

(a) shall present a final report on the bank insolvency to the meeting,

(b) shall send a copy of the report to—

(i) the PRA,

(ia) the FCA,

(ii) the FSCS,

(iii) the Bank of England,

(iv) the Treasury, and

(v) the registrar of companies, and

(3) At the meeting the liquidation committee shall—

(a) consider the report, and

(b) decide whether to release the bank liquidator.

(4) If the liquidation committee decides to release the bank liquidator, the bank liquidator—

(a) shall notify the court and the registrar of companies, and

(b) vacates office, and has release, when the court is notified.

(5) If the liquidation committee decides not to release the bank liquidator, the bank liquidator may apply to the Secretary of State for release; if the application is granted, the bank liquidator—

(a) vacates office when the application is granted, and

(b) has release from a time determined by the Secretary of State.

(6) In the case of a bank liquidator in Scotland, a reference in subsection (5) to the Secretary of State is a reference to the Accountant of Court.

(7) On receipt of a notice under subsection (4)(a) the registrar of companies shall register it.

(8) At the end of the period of 3 months beginning with the day of the registration of the notice, the bank is dissolved (subject to deferral under section 116).

Dissolution: supplemental

116

(1) The Secretary of State may by direction defer the date of dissolution under section 115, on the application of a person who appears to the Secretary of State to be interested.

(2) An appeal to the court lies from any decision of the Secretary of State on an application for a direction under subsection (1).

(3) Subsection (1) does not apply where the bank insolvency order was made by the court in Scotland; but the court may by direction defer the date of dissolution on an application by a person appearing to the court to have an interest.

(4) A person who obtains deferral under subsection (1) or (3) shall, within 7 days after the giving of the deferral direction, deliver a copy of the direction to the registrar of companies for registration.

(5) A person who without reasonable excuse fails to comply with subsection (4) is liable to a fine and, for continued contravention, to a daily default fine, in each case of the same amount as for a contravention of section 205(6) of the Insolvency Act 1986 (dissolution).

(6) The bank liquidator may give the notice summoning the final meeting under section 115 above at the same time as giving notice of any final distribution of the bank's property; but, if summoned for an earlier date the meeting shall be adjourned (and, if necessary, further adjourned) until a date on which the bank liquidator is able to report to the meeting that the winding up of the bank is for practical purposes complete.

(7) A bank liquidator must retain sufficient sums to cover the expenses of the final meeting under section 115 above.

Other processes

Bank insolvency as alternative order

117

(1) On a petition for a winding up order or an application for an administration order in respect of a bank the court may, instead, make a bank insolvency order.

(2) A bank insolvency order may be made under subsection (1) only—

(a) on the application of the PRA made with the consent of ... the FCA, or

(b) on the application of the Bank of England.

Voluntary winding-up

118

A resolution for voluntary winding up of a bank under section 84 of the Insolvency Act 1986 shall have no effect without the prior approval of the court.

Exclusion of other procedures

119

(1) The following paragraphs of Schedule B1 to the Insolvency Act 1986 (administration) apply to a bank insolvency order as to an administration order.

(2) Those paragraphs are—

(a) paragraph 40 (dismissal of pending winding-up petition), and

(b) paragraph 42 (moratorium on insolvency proceedings).

(3) For that purpose—

(a) a reference to an administration order is a reference to a bank insolvency order,

(b) a reference to a company being in administration is a reference to a bank being in bank insolvency, and

Notice to FSA of preliminary steps

120

(1) An application for an administration order in respect of a bank may not be determined unless the conditions below are satisfied.

(2) A petition for a winding up order in respect of a bank may not be determined unless the conditions below are satisfied.

(3) A resolution for voluntary winding up of a bank may not be made unless the conditions below are satisfied.

(4) An administrator of a bank may not be appointed unless the conditions below are satisfied.

(5) Condition 1 is that the the PRA and the Bank of England have been notified—

(a) by the applicant for an administration order, that the application has been made,

(b) by the petitioner for a winding up order, that the petition has been presented,

(d) by the person proposing to appoint an administrator, of the proposed appointment.

(6) Condition 2 is that a copy of the notice complying with Condition 1 has been filed (in Scotland, lodged) with the court (and made available for public inspection by the court).

(7) Condition 3 is that—

(a) the period of 7 days, beginning with the day on which the notice is received, has ended, or

(b) both—

(i) the Bank of England has informed the person who gave the notice that it does not intend to exercise a stabilisation power under Part 1 in relation to the firm (and Condition 5 has been met, if applicable), and

(ii) each of the PRA and the Bank of England has informed the person who gave the notice that it does not intend to apply for a bank insolvency order.

(8) Condition 4 is that no application for a bank insolvency order is pending.

(8A) Condition 5—

(a) applies only if a resolution instrument has been made under section 12A with respect to the bank in the 3 months ending with the date on which the PRA receives the notification under Condition 1, and

(b) is that the Bank of England has informed the person who gave the notice that it consents to the insolvency procedure to which the notice relates going ahead.

(9) Arranging for the giving of notice in order to satisfy Condition 1 can be a step with a view to minimising the potential loss to a bank's creditors for the purpose of section 214 of the Insolvency Act 1986 (wrongful trading).

(10) Where notice has been given under Condition 1 —

(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(b) the PRA shall inform the person who gave the notice, within the period in Condition 3(a), whether it intends to apply for a bank insolvency order, ...

(c) if the Bank of England decides to apply for a bank insolvency order or to exercise a stabilisation power under Part 1, the Bank shall inform the person who gave the notice, within the period in Condition 3(a), and

(d) if Condition 5 applies, the Bank of England must, within the period in Condition 3(a), inform the person who gave the notice whether or not it consents to the insolvency procedure to which the notice relates going ahead.

(11) References in this section to the insolvency procedure to which the notice relates are to the procedure for the determination, resolution or appointment in question (see subsections (1) to (4)).

Disqualification of directors

121

(1) In this section “the Disqualification Act” means the Company Directors Disqualification Act 1986.

(2) In the Disqualification Act—

(a) a reference to liquidation includes a reference to bank insolvency,

(b) a reference to winding up includes a reference to making or being subject to a bank insolvency order,

(d) a reference to a liquidator includes a reference to a bank liquidator.

(3) For the purposes of the application of section 7A of the Disqualification Act (office-holder’s report on conduct of directors) to a bank which is subject to a bank insolvency order—

(a) the “office-holder” is the bank liquidator,

(b) the “insolvency date” means the date on which the bank insolvency order is made, and

(4) After section 21 of the Disqualification Act (interaction with Insolvency Act) insert—

(21A) Section 121 of the Banking Act 2009 provides for this Act to apply in relation to bank insolvency as it applies in relation to liquidation.

Application of insolvency law

122

(1) The Secretary of State and the Treasury may by order made jointly—

(a) provide for an enactment about insolvency to apply to bank insolvency (with or without specified modifications);

(b) amend, or modify the application of, an enactment about insolvency in consequence of this Part.

(2) An order under subsection (1)—

(a) shall be made by statutory instrument, and

(b) may not be made unless a draft has been laid before and approved by resolution of each House of Parliament.

Miscellaneous

Role of FSCS

123

(1) For the purpose of co-operating in the pursuit of Objective 1 in section 99 the FSCS—

(a) may make or arrange for payments to or in respect of eligible depositors of the bank, and

(b) may make money available to facilitate the transfer of accounts of eligible depositors of the bank.

(2) The FSCS may include provision about expenditure under this section; and, in particular—

(a) money may be raised through the imposition of a levy under Part 15 of the Financial Services and Markets Act in respect of expenditure or possible expenditure under this section, and

(b) sums raised in connection with the scheme (whether or not under paragraph (a)) may be expended under this section.

(3) In section 220(3)(a) of the Financial Services and Markets Act 2000 (Compensation Scheme: information) after “liquidator” insert “ , bank liquidator ”.

(4) The FSCS is entitled to participate in proceedings for or in respect of a bank insolvency order.

(5) A bank liquidator must—

(a) comply with a request of the FSCS for the provision of information, and

(b) provide the FSCS with any other information which the bank liquidator thinks might be useful for the purpose of co-operating in the pursuit of Objective 1.

(6) A bank liquidator may enter into an agreement under section 221A of the Financial Services and Markets Act 2000 (Compensation Scheme: delegation of functions) for the bank liquidator to exercise functions of the scheme manager for the purpose of facilitating the pursuit of Objective 1.

(7) Where a bank insolvency order is made in respect of a bank, the fact that it later ceases to be an authorised person does not prevent the operation of the compensation scheme in respect of it; and for that purpose the bank is a relevant person within the meaning of section 213(9) of the Financial Services and Markets Act 2000 despite the lapse of authorisation.

Transfer of accounts

124

(1) This section applies where a bank liquidator arranges, in pursuit of Objective 1 in section 99, for the transfer of eligible depositors' accounts from the bank to another financial institution.

(2) The arrangements may disapply, or provide that they shall have effect despite, any restriction arising by virtue of contract or legislation or in any other way.

(3) In subsection (2) “restriction” includes—

(a) any restriction, inability or incapacity affecting what can and cannot be assigned or transferred (whether generally or by a particular person), and

(b) a requirement for consent (by any name).

(4) In making the arrangements mentioned in subsection (1) the bank liquidator must ensure that eligible depositors will be able to remove money from transferred accounts as soon as is reasonably practicable after transfer.

Rules

125

(1) Section 411 of the Insolvency Act 1986 (company insolvency rules) is amended as follows.

(2) After subsection (1) insert—

(1A) Rules may also be made for the purpose of giving effect to Part 2 of the Banking Act 2009 (bank insolvency orders); and rules for that purpose shall be made— (a) in relation to England and Wales, by the Lord Chancellor with the concurrence of— (i) the Treasury, and (ii) in the case of rules that affect court procedure, the Lord Chief Justice, or (b) in relation to Scotland, by the Treasury.

(3) In subsection (2)—

(a) after “subsection (1),” insert “ (1A) ”;

(b) in paragraph (b), after “Secretary of State” insert “ or the Treasury ”.

(4) After subsection (2B) insert—

(2C) For the purposes of subsection (2), a reference in Schedule 8 to this Act to doing anything under or for the purposes of a provision of this Act includes a reference to doing anything under or for the purposes of Part 2 of the Banking Act 2009.

(5) In subsection (3)—

(a) after “provisional liquidator” insert “ or bank liquidator ”, and

(b) after “Parts I to VII of this Act” insert “ or Part 2 of the Banking Act 2009 ”.

(6) In subsection (5), after “the Secretary of State” insert “ or the Treasury ”.

(7) In paragraph 27 of Schedule 8 to the Insolvency Act 1986 (provisions capable of inclusion in company insolvency rules), after “Secretary of State” insert “ or the Treasury ”.

(8) Section 413(2) of the Insolvency Act 1986 (rules: duty to consult Insolvency Rules Committee) shall not apply to the first set of rules which is made in reliance on this section.

Fees

126

After section 414(8) of the Insolvency Act 1986 (fees orders) insert—

(8A) This section applies in relation to Part 2 of the Banking Act 2009 (bank insolvency) as in relation to Parts I to VII of this Act.

Insolvency Services Account

127

A bank liquidator who obtains money by realising assets in the course of the bank insolvency must pay it into the Insolvency Services Account (kept by the Secretary of State).

Evidence

128

In section 433(1) of the Insolvency Act 1986 (admissibility of statements of affairs) after paragraph (a) insert (before the “and”)—

(aa) a statement made in pursuance of a requirement imposed by or under Part 2 of the Banking Act 2009 (bank insolvency),

Co-operation between courts

129

(1) Provisions of or by virtue of this Part are “insolvency law” for the purposes of section 426 of the Insolvency Act 1986(co-operation between courts).

(2) At the end of that section add—

(13) Section 129 of the Banking Act 2009 provides for provisions of that Act about bank insolvency to be “insolvency law” for the purposes of this section.

Building societies

130

(1) The Treasury may by order provide for this Part to apply to building societies (within the meaning of section 119 of the Building Societies Act 1986) as it applies to banks, subject to modifications set out in the order.

(2) An order may—

(a) amend the Building Societies Act 1986 or any other enactment which relates, or in so far as it relates, to building societies;

(b) amend an enactment amended by this Part;

(d) apply a provision made under or by virtue of this Part, with or without modifications, to this Part as it applies to building societies.

(3) An order—

(a) shall be made by statutory instrument, and

(b) may not be made unless a draft has been laid before and approved by resolution of each House of Parliament.

(4) Provision made under or by virtue of this Part may make special provision in relation to the application of this Part to building societies.

Credit unions

131

(1) The Treasury may by order provide for this Part to apply to credit unions (within the meaning of section 31 of the Credit Unions Act 1979) as it applies to banks, subject to modifications set out in the order.

(2) An order may—

(a) amend the Credit Unions Act 1979, the Industrial and Providential Societies Act 1965 or any other enactment which relates, or in so far as it relates, to credit unions;

(b) amend an enactment amended by this Part;

(d) apply a provision made under or by virtue of this Part, with or without modifications, to this Part as it applies to credit unions.

(3) An order—

(a) shall be made by statutory instrument, and

(b) may not be made unless a draft has been laid before and approved by resolution of each House of Parliament.

(4) Provision made under or by virtue of this Part may make special provision in relation to the application of this Part to credit unions.

Partnerships

132

(1) The Lord Chancellor may, by order made with the concurrence of the Secretary of State and the Lord Chief Justice, modify provisions of this Part in their application to partnerships.

(2) For procedural purposes an order under subsection (1) shall be treated in the same way as an order under section 420 of the Insolvency Act 1986 (partnerships).

(3) This section does not apply in relation to partnerships constituted under the law of Scotland.

Scottish partnerships

133

(1) The Secretary of State may by order modify provisions of this Part in their application to partnerships constituted under the law of Scotland.

(2) An order—

(a) shall be made by statutory instrument, and

(b) shall be subject to annulment in pursuance of a resolution of either House of Parliament.

Northern Ireland

134

In the application of this Part to Northern Ireland—

(a) a reference to an enactment is to be treated as a reference to the equivalent enactment having effect in relation to Northern Ireland,

(b) where this Part amends an enactment an equivalent amendment (incorporating any necessary modification) is made to the equivalent enactment having effect in relation to Northern Ireland,

(c) references to the Secretary of State, except in section 122, are to be treated as references to the Department of Enterprise, Trade and Investment,

(d) a reference to the Insolvency Services Account is to be treated as a reference to the Insolvency Account,

(e) a reference to section 31 of the Credit Unions Act 1979 is to be treated as a reference to Article 2 of the Credit Unions (Northern Ireland) Order 1985,

(f) the Judgments Enforcement (Northern Ireland) Order 1981 has effect in place of sections 183 and 184 of the Insolvency Act 1986 (applied by section 103 above), and

(g) the reference in section 132 to the Lord Chief Justice is a reference to the Lord Chief Justice in Northern Ireland.

Consequential provision

135

(1) The Treasury may by order make provision in consequence of this Part.

(2) An order may, in particular, amend or modify the effect of an enactment (including a fiscal enactment) passed before the commencement of this Part.

(3) An order—

(a) shall be made by statutory instrument, and

(b) may not be made unless a draft has been laid before and approved by resolution of each House of Parliament.

Part 3 — Bank Administration

Introduction

Overview

136

(1) This Part provides for a procedure to be known as bank administration.

(2) The main features of bank administration are that—

(a) it is used where part of the business of a bank is sold to a commercial purchaser in accordance with section 11 or transferred to a resolution company in accordance with section 12 or 12ZA (and it can also be used in certain cases of multiple transfers under Part 1),

(b) the court appoints a bank administrator on the application of the Bank of England,

(c) the bank administrator is able and required to ensure that the non-sold or non-transferred part of the bank (“the residual bank”) provides services or facilities required to enable the commercial purchaser (“the private sector purchaser”) or the transferee (“the resolution company ”) to operate effectively, and

(d) in other respects the process is the same as for normal administration under the Insolvency Act 1986, subject to specified modifications.

(3) The Table describes the provisions of this Part.

Sections	Topic
Sections 136 to 140	Introduction
Sections 141 to 148	Process
Sections 149 to 152A	Multiple transfers
Sections 153 and 154	Termination
Sections 155 to 168	Miscellaneous

Objectives

137

(1) A bank administrator has two objectives—

(a) Objective 1: support for commercial purchaser or resolution company (see section 138), and

(b) Objective 2: “normal” administration (see section 140).

(2) Objective 1 takes priority over Objective 2 (but a bank administrator is obliged to begin working towards both objectives immediately upon appointment).

Objective 1: supporting private sector purchaser or bridge bank

138

(1) Objective 1 is to ensure the supply to the private sector purchaser or resolution company of such services and facilities as are required to enable it, in the opinion of the Bank of England, to operate effectively.

(2) For the purposes of Objective 1—

(a) the reference to services and facilities includes a reference to acting as transferor or transferee under a supplemental or reverse property transfer instrument (including a bridge bank supplemental property transfer instrument or bridge bank supplemental reverse property transfer instrument), and

(b) the reference to “supply” includes a reference to supply by persons other than the residual bank.

(3) In the case of bank administration following a private sector purchase the bank administrator must co-operate with any request of the Bank of England to enter into an agreement for the residual bank to provide services or facilities to the private sector purchaser; and—

(a) in pursuing Objective 1 the bank administrator must have regard to the terms of that or any other agreement entered into between the residual bank and the private sector purchaser,

(b) in particular, the bank administrator must avoid action that is likely to prejudice performance by the residual bank of its obligations in accordance with those terms,

(c) if in doubt about the effect of those terms the bank administrator may apply to the court for directions under paragraph 63 of Schedule B1 to the Insolvency Act 1986 (applied by section 145 below), and

(d) the private sector purchaser may refer to the court a dispute about any agreement with the residual bank, by applying for directions under paragraph 63 of Schedule B1.

(4) In the case of bank administration following transfer to a resolution company, the bank administrator must co-operate with any request of the Bank of England to enter into an agreement for the residual bank to provide services or facilities to the resolution company; and—

(a) the bank administrator must avoid action that is likely to prejudice performance by the residual bank of its obligations in accordance with an agreement,

(b) the bank administrator must ensure that so far as is reasonably practicable an agreement entered into includes provision for consideration at market rate,

(c) paragraph (b) does not prevent the bank administrator from entering into an agreement on any terms that the bank administrator thinks necessary in pursuit of Objective 1, and

(d) this subsection does not apply after Objective 1 ceases.

(5) Where a bank administrator requires the Bank of England's consent or approval to any action in accordance with this Part, the Bank may withhold consent or approval only on the grounds that the action might prejudice the achievement of Objective 1.

Objective 1: duration

139

(1) Objective 1 ceases if the Bank of England notifies the bank administrator that the residual bank is no longer required in connection with the private sector purchaser or resolution company.

(2) A bank administrator who thinks that Objective 1 is no longer required may apply to the court for directions under paragraph 63 of Schedule B1 to the Insolvency Act 1986 (applied by section 145 below); and the court may direct the Bank of England to consider whether to give notice under subsection (1) above.

(3) If immediately upon the making of a bank administration order the Bank of England thinks that the residual bank is not required in connection with the private sector purchaser or resolution company, the Bank of England may give a notice under subsection (1).

(4) A notice under subsection (1) is referred to in this Part as an “Objective 1 Achievement Notice”.

Objective 2: “normal” administration

140

(1) Objective 2 is to—

(a) rescue the residual bank as a going concern (“Objective 2(a)”), or

(b) achieve a better result for the residual bank's creditors as a whole than would be likely if the residual bank were wound up without first being in bank administration (“Objective 2(b)”).

(2) In pursuing Objective 2 a bank administrator must aim to achieve Objective 2(a) unless of the opinion either—

(a) that it is not reasonably practicable to achieve it, or

(b) that Objective 2(b) would achieve a better result for the residual bank's creditors as a whole.

(3) In pursuing Objective 2(b) in bank administration following transfer to a resolution company, the bank administrator may not realise any asset unless—

(a) the asset is on a list of realisable assets agreed between the bank administrator and the Bank of England, or

(b) the Bank of England has given an Objective 1 Achievement Notice.

Process

Bank administration order

141

(1) A bank administration order is an order appointing a person as the bank administrator of a bank.

(2) A person is eligible for appointment as a bank administrator if qualified to act as an insolvency practitioner in relation to the bank.

(3) An appointment may be made only if the person has consented to act.

(4) A bank administration order takes effect in accordance with its terms; and—

(a) the process of a bank administration order having effect may be described as “bank administration” in relation to the bank, and

(b) while the order has effect the bank may be described as being “in bank administration”.

Application

142

(1) An application for a bank administration order may be made to the court by the Bank of England.

(2) An application must nominate a person to be appointed as the bank administrator.

(3) The bank must be given notice of an application, in accordance with rules under section 411 of the Insolvency Act 1986 (as applied by section 160 below).

Grounds for applying

143

(1) The Bank of England may apply for a bank administration order in respect of a bank if the following conditions are met.

(2) Condition 1 is that the Bank of England has made or intends to make a property transfer instrument in respect of the bank in accordance with section 11(2) , 12(2) or 12ZA(3).

(3) Condition 2 is that the Bank of England is satisfied that the residual bank—

(a) is unable to pay its debts, or

(b) is likely to become unable to pay its debts as a result of the property transfer instrument which the Bank intends to make.

Grounds for making

144

(1) The court may make a bank administration order if satisfied that the conditions in section 143 were met.

(2) On an application for a bank administration order the court may—

(a) grant the application,

(b) adjourn the application (generally or to a specified date), or

General powers, duties and effect

145

(1) A bank administrator may do anything necessary or expedient for the pursuit of the Objectives in section 137.

(2) The following provisions of this section provide for—

(a) general powers and duties of bank administrators (by application of provisions about administrators), and

(b) the general process and effects of bank administration (by application of provisions about administration).

(3) The provisions set out in the Tables apply in relation to bank administration as in relation to administration, with—

(a) the modifications set out in subsection (4),

(b) any other modification specified in the Tables, and

(4) The modifications are that—

(a) a reference to the administrator is a reference to the bank administrator,

(b) a reference to administration is a reference to bank administration,

(d) except where otherwise specified in Table 2, a reference to a company is a reference to the bank,

(e) a reference to the purpose of administration is a reference to the Objectives in section 137, and

(f) in relation to provisions of the Insolvency Act 1986 other than Schedule B1 and section 246ZB, the modifications in section 103 above apply (but converting references into references to bank administration or administrators rather than to bank insolvency or liquidators).

(5) Powers conferred by this Act, by the Insolvency Act 1986 (as applied) and the Companies Acts are in addition to, and not in restriction of, any existing powers of instituting proceedings against a contributory or debtor of a bank, or the estate of any contributory or debtor, for the recovery of any call or other sum.

(6) A reference in an enactment or other document to anything done under a provision applied by this Part includes a reference to the provision as applied.

(7) In the Tables “Schedule 9 to the 2015 Act” means Schedule 9 to the Small Business, Enterprise and Employment Act 2015 (further amendments relating to the abolition of requirements to hold meetings: company insolvency).

Provision of Schedule B1	Subject	Modification or comment
Para. 40(1)(a)	Dismissal of pending winding-up petition
Para. 41	Dismissal of administrative or other receiver
Para. 42	Moratorium on insolvency proceedings	Ignore sub-paras. (4) and (5).
Para. 43	Moratorium on other legal process	aIn the case of bank administration following transfer to a resolution company, unless the Bank of England has given an Objective 1 Achievement Notice consent of the bank administrator may not be given for the purposes of para. 43 without the approval of the Bank of England.bIn the case of bank administration following transfer to a resolution company, unless the Bank of England has given an Objective 1 Achievement Notice, in considering whether to give permission under sub-para. (6) to a winding-up the court must have regard to the Objectives in section 137.cIn considering whether to give permission for the purposes of para. 43 the court must have regard to the Objectives in section 137.
Para. 44(1)(a) and (5)	Interim moratorium
Para. 46	Announcement of appointment	Ignore sub-para. (6)(b) and (c).
Paras. 47 & 48	Statement of affairs
Para. 49	Administrator's proposals	aPara. 49 does not apply unless the Bank of England has given an Objective 1 Achievement Notice; for bank administrator's proposals before the Bank of England has given an Objective 1 Achievement Notice, see section 147.bTreat the reference in sub-para. (1) to the purpose of administration as a reference to Objective 2.cBefore making proposals under sub-para. (1) in the case of bank administration following transfer to a resolution company, the bank administrator must consult the Bank of England about the chances of a payment to the residual bank from a scheme established by resolution fund order under section 49(3).dTreat the reference in sub-para. (2)(b) to the objective mentioned in para. 3(1)(a) or (b) as a reference to Objective 2(a).eIgnore sub-para.(3)(b).eaIgnore the amendment made by paragraph 10(2) of Schedule 9 to the 2015 Act.fTreat references in sub-para. (5) to the company's entering administration as references to satisfaction of the condition in para. (a) above.
Paras. 50–58	Creditors' meeting	zaIgnore the repeal of Paras 50 and 58 by paragraph 10(3) and (22) of Schedule 9 to the 2015 Act.zbIgnore the amendments of Paras 51 to 57 made by paragraph 10(4) to (21) of Schedule 9 to the 2015 Act.aTreat references in para. 51(2) to the company's entering administration as references to the giving of an Objective 1 Achievement Notice.bThe bank administrator may comply with a request under para. 56(1)(a) only if satisfied that it will not prejudice pursuit of Objective 1 in section 137.cA creditors' meeting may not establish a creditors' committee in reliance on para. 57 until the Bank of England has given an Objective 1 Achievement Notice.dUntil that time the Bank of England shall have the functions of the creditors' committee.
Para. 59	General powers	A bank administrator may not rely on para. 59 (or subsection (1) above) for the purpose of recovering property transferred by property transfer instrument.
Para. 60 and Schedule 1	General powers	aThe exercise of powers under Schedule 1 is subject to section 137(2).bIn the case of bank administration following transfer to a resolution company, until the Bank of England has given an Objective 1 Achievement Notice powers under the following paragraphs of Schedule 1 may be exercised only with the Bank of England's consent: 2, 3, 11, 14, 15, 16, 17, 18 and 21.
Para. 61	Directors
Para. 62	Power to call meetings of creditors	Ignore the amendment made by paragraph 10(23) of Schedule 9 to the 2015 Act.
Para. 63	Application to court for directions	aBefore the Bank of England has given an Objective 1 Achievement Notice, the bank administrator may apply for directions if unsure whether a proposed action would prejudice the pursuit of Objective 1; and before making an application in reliance on this paragraph the bank administrator must give notice to the Bank of England, which shall be entitled to participate in the proceedings.bIn making directions the court must have regard to the Objectives in section 137.
Para. 64.	Management powers.
Para. 65	Distribution to creditors	aIn the case of bank administration following transfer to a resolution company, until the Bank of England has given an Objective 1 Achievement Notice a bank administrator may make a distribution only with the Bank of England's consent.b Where paragraph (a) applies, ignore sub-para (3).
Para. 66	Payments
Para. 67	Taking custody of property
Para. 68	Management	Before the approval of proposals under para. 53 a bank administrator shall manage the bank's affairs, business and property in accordance with principles agreed between the bank administrator and the Bank of England.
Para. 69	Agency
Para. 70	Floating charges	The bank administrator may take action only if satisfied that it will not prejudice pursuit of Objective 1 in section 137.
Para. 71	Fixed charges	The court may make an order only if satisfied that it will not prejudice pursuit of Objective 1 in section 137.
Para. 72	Hire-purchase property	In the case of administration following transfer to a resolution company, until the Bank of England has given an Objective 1 Achievement Notice an application may be made only with the Bank of England's consent.
Para. 73	Protection for secured and preferential creditors	aTreat a reference to proposals as including a reference to the principles specified in the modification of para. 68 set out above.bPara. 73(1)(a) does not apply until the Bank of England has given an Objective 1 Achievement Notice.
Para. 74	Challenge to administrator's conduct	zaIgnore the amendment made by paragraph 10(24) of Schedule 9 to the 2015 Act.aThe Bank of England may make an application to the court, on any grounds, including grounds of insufficient pursuit of Objective 1 in section 137 (in addition to applications that may anyway be made under para. 74).bUntil the Bank of England has given an Objective 1 Achievement Notice, an order may be made on the application of a creditor only if the court is satisfied that it would not prejudice pursuit of Objective 1 in section 137.
Para. 75	Misfeasance	In addition to applications that may anyway be made under para. 75, an application may be made by the bank administrator or the Bank of England.
Para. 79	Termination: successful rescue	aIgnore sub-para. (2).bSee section 153.
Para. 84	Termination: no more assets for distribution	See section 154.
Para. 85	Discharge of administration order
Para. 86	Notice to Companies Registrar of end of administration	See section 153.
Para. 87	Resignation	A bank administrator may resign only by notice in writing—to the court, copied to the Bank of England, orin the case of a bank administrator appointed by the creditors' committee under para. 90, to the creditors' committee.
Para. 88	Removal	Until the Bank of England has given an Objective 1 Achievement Notice, an application for an order may be made only with the Bank of England's consent.
Para. 89	Disqualification	The notice under sub-para. (2) must be given to the Bank of England.
Paras. 90 & 91	Replacement	aUntil an Objective 1 Notice has been given, the Bank of England, and nobody else, may make an application under para. 91(1).bAfter that, either the Bank of England or a creditors' committee may apply.cIgnore para. 91(1)(b) to (e) and (2).
Para. 96	Substitution of floating charge-holder	Para. 96 applies to a bank administrator, but—only after an Objective 1 Achievement Notice has been given, andignoring references to priority of charges.
Para. 98	Discharge	Ignore the amendments made by paragraph 10(36) to (38) of Schedule 9 to the 2015 Act. Discharge takes effect—where the person ceases to be bank administrator before an Objective 1 Achievement Notice has been given, at a time determined by the Bank of England, andotherwise, at a time determined by resolution of the creditors' committee (for which purpose ignore sub-para. (3)).
Para. 99	Vacation of office: charges and liabilities	In the application of sub-para. (3), payments may be made only—in accordance with directions of the Bank of England, andif the Bank is satisfied that they will not prejudice Objective 1 in section 137.
Paras. 100-103	Joint administrators	Until an Objective 1 Achievement Notice has been given, an application under para. 103 may be made only by the Bank of England.
Para. 104	Validity
Para. 106 (and section 430 and Schedule 10)	Fines	Ignore the amendments made by paragraph 11 of Schedule 9 to the 2015 Act.
Paras. 107–109	Extension of time limits	aUntil an Objective 1 Achievement Notice has been given, an application under para. 107 may be made only with the Bank of England's consent.bIn considering an application under para. 107 the court must have regard to Objective 1 in section 137.baIgnore the amendments of Para 108 made by paragraph 10(39) to (43) of Schedule 9 to the 2015 Act.cIn para. 108(1) “consent” means consent of the Bank of England.
Para. 110	Amendment of provisions about time	An order under para. 110 may amend a provision of the Schedule as it applies by virtue of this section (whether or not in the same way as it amends the provision as it applies otherwise).
Para. 111	Interpretation	Ignore the amendment made by paragraph 10(44) of Schedule 9 to the 2015 Act.
Paras 112 to 114	Scotland:miscellaneous
Para 115	Scotland: floating charges	(a) In Scotland, on the giving by the Bank of England of consent as provided for in Para 65 (as applied by this section), any floating charge granted by the bank attaches to the property which is subject to the charge, unless it has already so attached, but only if the distribution concerned is to be made to creditors of the residual bank who are neither secured creditors nor preferential creditors and otherwise than by virtue of section 176A(2)(a) (as applied by this section).(b) Where paragraph (a) applies, ignore sub-paras (1A) and (1B).
Para 116	Scotland: payment to holder of floating charge subject to rights
Section	Subject	Modification or comment
---	---	---
Section 135	Provisional appointment	aTreat the reference to the presentation of a winding-up petition as a reference to the making of an application for a bank administration order.bSubsection (2) applies in relation to England and Wales and Scotland (and subsection (3) does not apply).cIgnore the reference to the official receiver.dOnly a person who is qualified to act as an insolvency practitioner in relation to the bank and who consents to act may be appointed.eThe court may only confer on a provisional bank administrator functions in connection with the pursuance of Objective 1; and section 138(2)(a) does not apply before a bank administration order is made.fA provisional bank administrator may not pursue Objective 2.gThe appointment of a provisional bank administrator lapses on the appointment of a bank administrator.hSection 172(1), (2) and (5) apply to a provisional bank administrator.
Section 168(4) (and para. 13 of Schedule 4)	Discretion in managing and distributing assets	In the case of bank administration following transfer to a resolution company, until the Bank of England has given an Objective 1 Achievement Notice distribution may be made only—with the Bank of England's consent, orout of assets which have been designated as realisable by agreement between the bank administrator and the Bank of England.
Section 176ZB	Application of proceeds of office-holder claims
Section 176A	Unsecured creditors	In the case of bank administration following transfer to a resolution company, until the Bank of England has given an Objective 1 Achievement Notice distribution may be made in reliance on s. 176A only—with the Bank of England's consent, orout of assets which have been designated as realisable by agreement between the bank administrator and the Bank of England.
Section 178	Disclaimer of onerous property	In the case of bank administration following transfer to a resolution company, until the Bank of England has given an Objective 1 Achievement Notice notice of disclaimer may be given only with the Bank of England's consent.
Section 179	Disclaimer of leaseholds
Section 180	Land subject to rentcharge
Section 181	Disclaimer: powers of court
Section 182	Leaseholds
Section 188	Publicity
. . .	. . .
. . .	. . .	. . .
Section 233	Utilities
Section 233A	Further protection of utilities
Section 234	Getting in company's property
Section 235	Co-operation with liquidator
Section 236	Inquiry into company's dealings
Section 237	Section 236: enforcement by court
Section 238	Transactions at undervalue (England and Wales)
Section 239	Preferences (England and Wales)
Section 240	Ss. 238 & 239: relevant time
Section 241	Orders under ss. 238 & 239	aIn considering making an order in reliance on section 241 the court must have regard to Objective 1 of section 137.bIgnore subsections (2A)(a) and (3) to (3C).
Section 242	Gratuitous alienations (Scotland)
Section 243	Unfair preferences (Scotland)	In considering the grant of a decree under subsection (5) the court must have regard to Objective 1 of section 137.
Section 244	Extortionate credit transactions
Section 245	Avoidance of floating charges
Section 246	Unenforceability of liens
Section 246ZA	Fraudulent trading: administration
Section 246ZB	Wrongful trading: administration	(a) Treat the reference in subsection (2)(b) to going into insolvent liquidation as a reference to entering bank insolvency under Part 2 of this Act at a time when the bank’s assets are insufficient for the payment of its debts and other liabilities and the expenses of the bank insolvency.(b) Ignore subsection (6)(b).
Section 246ZC	Proceedings under section 246ZA or 246ZB
Section 246ZD	Power to assign certain causes of action
Sections 386 & 387, and Schedule 6 (and Schedule 4 to the Pension Schemes Act 1993)	Preferential debts
Section 389	Offence of acting without being qualified	Treat references to acting as an insolvency practitioner as references to acting as a bank administrator.
Sections 390 to 391T	Authorisation and regulation of insolvency practitioners	(a) In section 390 treat references to acting as an insolvency practitioner as references to acting as a bank administrator.(b) Read subsection (2) of that section (as so modified) as if after “authorised” there were inserted “to act as an insolvency practitioner”.(c) An order under section 391 has effect in relation to any provision applied for the purposes of bank administration.(d) In sections 390A, 390B(1) and (3), 391O(1)(b) and 391R(3)(b), in a reference to authorisation or permission to act as an insolvency practitioner in relation to (or only in relation to) companies the reference to companies has effect without the modification in subsection (4)(d) of this section.(e) In sections 391Q(2)(b) and 391S(3)(e) the reference to a company has effect without the modification in subsection (4)(d) of this section.
Sections 423–425	Transactions defrauding creditors	aIn considering granting leave under section 424(1) the court must have regard to Objective 1 of section 137.bIn considering making an order in reliance on section 425 the court must have regard to Objective 1 of section 137.
Sections 430–432 & Schedule 10	Offences
Section 433	Statements: admissibility	For section 433(1)(a) and (b) substitute a reference to a statement prepared for the purposes of a provision of this Part.

Status of bank administrator

146

A bank administrator is an officer of the court.

Administrator’s proposals

147

(1) This section applies before the giving of an Objective 1 Achievement Notice (at which point paragraph 49 of Schedule B1 to the Insolvency Act 1986 applies in accordance with section 145).

(2) The bank administrator must as soon as is reasonably practicable after appointment make a statement setting out proposals for achieving the Objectives in section 137.

(3) The statement must say whether the bank administrator proposes to pursue Objective 2(a) or 2(b) in section 140.

(4) The statement must have been agreed with the Bank of England.

(5) But a bank administrator who is unable to agree a statement with the Bank of England may apply to the court for directions under paragraph 63 of Schedule B1 to the Insolvency Act 1986 (as applied by section 145); and the court may make any order, including dispensing with the need for the Bank of England's agreement.

(6) The bank administrator must send the statement to the PRA and a copy of it to the FCA.

(7) The bank administrator may revise the statement (and subsections (4) to (6) apply to a revised statement as to the original).

(8) The statement shall be treated in the same way (subject to this section) as a statement under paragraph 49 of Schedule B1 to the Insolvency Act 1986.

148

(1) This section applies to bank administration following transfer to a resolution company.

(2) Within the period of 5 days beginning with the day on which the bank administrator is appointed, the Bank of England must give the bank administrator information about the financial positions of the residual bank and the resolution company.

(3) While the residual bank is in bank administration the resolution company must give the bank administrator on request information about the financial position of the resolution company that the bank administrator requires for the purposes of pursuing Objective 1 in section 137.

(4) Until the Bank of England has given an Objective 1 Achievement Notice, the bank administrator must—

(a) give the Bank of England information on request,

(b) allow the Bank of England access to records on request,

(d) allow the resolution company access to records on request,

(e) keep the Bank of England informed about, and allow the Bank to participate in, any discussions between the bank administrator and another person which relate to, or are likely to affect, pursuit of Objective 1 in section 137, and

(f) keep the resolution company informed about, and allow the resolution company to participate in, any discussions between the bank administrator and another person which relate to, or are likely to affect, pursuit of Objective 1 in section 137.

(5) The Treasury shall by regulations prescribe—

(a) the classes of information that must be provided under subsections (2) to (4), and

(b) the classes of record to which access must be allowed under subsection (4).

(6) Regulations under subsection (5)—

(a) shall be made by statutory instrument, and

(b) shall be subject to annulment in pursuance of a resolution of either House of Parliament.

Multiple transfers

General application of this Part

149

(1) This section applies where more than one property transfer instrument is made in respect of a bank.

(2) For that purpose “property transfer instrument” includes—

(a) supplemental instruments under section 42,

(b) onward property transfer instruments under section 43, ...

(ba) bridge bank supplemental property transfer instruments under section 44D, and

(3) This Part applies to the bank with any modifications specified by the Treasury in regulations.

(4) The regulations—

(a) shall be made by statutory instrument, and

(b) may not be made unless a draft has been laid before and approved by resolution of each House of Parliament.

Bridge bank to private purchaser

150

(1) This section applies where the Bank of England gives a bank administrator —

(a) an Objective 1 Achievement Notice in respect of a resolution company, and

(b) notice that Objective 1 is still required to be pursued in respect of a commercial purchaser who has acquired all or part of the business of the resolution company.

(2) An Objective 1 Achievement Notice accompanied by a notice under subsection (1)(b) is referred to in this Part as an Objective 1 Interim Achievement Notice.

(3) Where an Objective 1 Interim Achievement Notice is given, Objective 1 continues to apply—

(a) in accordance with section 138(3), and

(b) with the commercial purchaser being treated as the “private sector purchaser”.

(4) An Objective 1 Interim Achievement Notice in respect of the resolution company—

(a) has effect as between the bank administrator and the resolution company, but

(b) has no other effect for the purposes of provisions of this Part which refer to the giving of an Objective 1 Achievement Notice.

(5) When the Bank of England gives the bank administrator an Objective 1 Achievement Notice in respect of the commercial purchaser, section 139 and other provisions of this Part which refer to the giving of an Objective 1 Achievement Notice shall have effect.

Property transfer from bridge bank

151

(1) This section applies where the Bank of England —

(a) transfers all or part of the business of a bank (“the original bank”) to a resolution company (“the original resolution company”) by making a property transfer instrument in accordance with section 12(2) or 12ZA(3), and

(b) later makes or proposes to make an onward property transfer instrument under section 43(2) from the resolution company to a transferee (“the onward transferee”).

(2) If the onward transferee is a company which is wholly owned by the Bank of England—

(a) the onward transferee is treated as a resolution company for the purposes of this Part, and

(b) the original resolution company is treated as a residual bank for the purposes of this Part.

(3) In any other case, the Bank of England may determine that the original resolution company is to be treated as a residual bank for the purposes of this Part.

(4) Where the original resolution company is put into bank administration in reliance on subsection (2)(b), Objective 1 shall apply in accordance with section 138(4) in relation to both—

(a) services provided by the original bank to the original resolution company, and

(b) services provided by the original resolution company to the onward transferee.

(5) Where the original resolution company is put into bank administration in reliance on a determination under subsection (3), Objective 1 shall apply in accordance with—

(a) section 138(3) in relation to services provided by the original resolution company to the onward transferee, and

(b) section 138(4) in relation to services provided by the original bank to the original resolution company .

(6) But the Bank may determine—

(a) that subsection (5) does not apply, and

(b) that section 150 shall apply as if the Bank had given—

(i) an Objective 1 Interim Achievement Notice in respect of the original resolution company, and

(ii) a notice under section 150(1)(b) in respect of the onward transferee.

Property transfer from temporary public ownership

152

(1) This section applies where the Treasury—

(a) make a share transfer order, in respect of securities issued by a bank (or a bank's holding company), in accordance with section 13(2), and

(b) later make a property transfer order from the bank (or from another bank which is or was in the same group as the bank) under section 45(2).

(2) This Part applies to the transferor under the property transfer order as to the transferor under a property transfer instrument.

(3) For that purpose this Part applies with any modifications specified by the Treasury in regulations; and the regulations—

(a) shall be made by statutory instrument, and

(b) may not be made unless a draft has been laid before and approved by resolution of each House of Parliament.

Termination

Successful rescue

153

(1) This section applies if—

(a) the Bank of England has given an Objective 1 Achievement Notice, and

(b) the bank administrator has pursued Objective 2(a) in section 140 and believes that it has been achieved.

(2) The bank administrator shall make an application under paragraph 79 of Schedule B1 to the Insolvency Act 1986 (court ending administration on achievement of objectives).

(3) A bank administrator who makes an application in accordance with subsection (2) must send a copy to the PRA and the FCA.

(4) Failure without reasonable excuse to comply with subsection (3) is an offence.

Winding-up or voluntary arrangement

154

(1) This section applies if—

(a) the Bank of England has given an Objective 1 Achievement Notice, and

(b) the bank administrator pursues Objective 2(b) in section 140.

(2) The bank administrator may—

(a) give a notice under paragraph 84 of Schedule B1 to the Insolvency Act 1986 (no more assets for distribution), or

(b) make a proposal in accordance with section 1 of that Act (company voluntary arrangement).

(2A) For the purpose of subsection (2)(a), paragraph 84 of Schedule B1 has effect without the amendment made by paragraph 10(33) of Schedule 9 to the Small Business, Enterprise and Employment Act 2015 (further amendments relating to opted-out creditors).

(3) Part 1 of the Insolvency Act 1986 shall apply to a proposal made by a bank administrator, with the following modifications.

(3A) Sections 2 to 6 and 7 ... have effect without the amendments of those provisions made by paragraphs 2 to 8 of Schedule 9 to the Small Business, Enterprise and Employment Act 2015 (further amendments relating to the abolition of requirements to hold meetings).

(4) In section 3 (summoning of meetings) subsection (2) (and not (1)) applies.

(5) The action that may be taken by the court under section 5(3) (effect of approval) includes suspension of the bank administration order.

(6) On the termination of a company voluntary arrangement the bank administrator may apply to the court to lift the suspension of the bank administration order.

(7) The bank administrator may not act under subsection (2) above unless satisfied that the bank has received any funds it is likely to receive from any scheme under a resolution fund order under section 52.

Miscellaneous

Disqualification of directors

155

(1) In this section “the Disqualification Act” means the Company Directors Disqualification Act 1986.

(2) In the Disqualification Act—

(a) a reference to liquidation includes a reference to bank administration,

(b) a reference to winding up includes a reference to making or being subject to a bank administration order,

(d) a reference to a liquidator includes a reference to a bank administrator.

(3) For the purposes of the application of section 7A of the Disqualification Act (office-holder’s report on conduct of directors) to a bank which is subject to a bank administration order—

(a) the “office-holder” is the bank administrator;

(b) the “insolvency date” means the date on which the bank administration order is made; and

(4) After section 21A of the Disqualification Act (bank insolvency–inserted by section 121 above) insert—

(21B) Section 155 of the Banking Act 2009 provides for this Act to apply in relation to bank administration as it applies in relation to liquidation.

Application of other law

156

(1) The Secretary of State and the Treasury may by order made jointly—

(a) provide for an enactment about insolvency or administration to apply to bank administration (with or without specified modifications);

(b) amend, or modify the application of, an enactment about insolvency or administration in consequence of this Part.

(2) An order under subsection (1)—

(a) shall be made by statutory instrument, and

(b) may not be made unless a draft has been laid before and approved by resolution of each House of Parliament.

Other processes

157

(1) Before the PRA or the FCA exercises an insolvency power in respect of a residual bank, whichever of them is exercising the power must give notice to the Bank of England, which may participate in any proceedings arising out of the exercise of the power.

(2) In subsection (1)—

(a) “residual bank” means a bank all or part of whose business has been transferred to a commercial purchaser in accordance with section 11 or to a resolution company in accordance with section 12 or 12ZA, and

(b) “insolvency power” means—

(i) section 359 of the Financial Services and Markets Act 2000 (application for administration order), and

(ii) section 367 of that Act (winding-up petition).

Building societies

158

(1) The Treasury may by order provide for this Part to apply to building societies (within the meaning of section 119 of the Building Societies Act 1986) as it applies to banks, subject to modifications set out in the order.

(2) An order may—

(a) amend the Building Societies Act 1986 or any other enactment which relates, or in so far as it relates, to building societies;

(b) amend an enactment amended by this Part;

(d) apply a provision made under or by virtue of this Part, with or without modifications, to this Part as it applies to building societies.

(3) An order—

(a) shall be made by statutory instrument, and

(b) may not be made unless a draft has been laid before and approved by resolution of each House of Parliament.

(4) Provision made under or by virtue of this Part may make special provision in relation to the application of this Part to building societies.

Credit unions

159

(1) The Treasury may by order provide for this Part to apply to credit unions (within the meaning of section 31 of the Credit Unions Act 1979) as it applies to banks, subject to modifications set out in the order.

(2) An order may—

(a) amend the Credit Union Act 1979, the Industrial and Providential Societies Act 1965 or any other enactment which relates, or in so far as it relates, to credit unions;

(b) amend an enactment amended by this Part;

(d) apply a provision made under or by virtue of this Part, with or without modifications, to this Part as it applies to credit unions.

(3) An order—

(a) shall be made by statutory instrument, and

(b) may not be made unless a draft has been laid before and approved by resolution of each House of Parliament.

(4) Provision made under or by virtue of this Part may make special provision in relation to the application of this Part to credit unions.

Rules

160

(1) Section 411 of the Insolvency Act 1986 (company insolvency rules) is amended as follows.

(2) After subsection (1A) (inserted by section 125 above) insert—

(1B) Rules may also be made for the purpose of giving effect to Part 3 of the Banking Act 2009 (bank administration); and rules for that purpose shall be made— (a) in relation to England and Wales, by the Lord Chancellor with the concurrence of— (i) the Treasury, and (ii) in the case of rules that affect court procedure, the Lord Chief Justice, or (b) in relation to Scotland, by the Treasury.

(3) In subsection (2), after “(1A)” (inserted by section 125 above) insert “ or (1B) ”.

(4) After subsection (2C) (inserted by section 125 above) insert—

(2D) For the purposes of subsection (2), a reference in Schedule 8 to this Act to doing anything under or for the purposes of a provision of this Act includes a reference to doing anything under or for the purposes of Part 3 of the Banking Act 2009.

(5) In subsection (3)—

(a) after “bank liquidator” (inserted by section 125 above) insert “ or administrator ”, and

(b) after “Part 2” (inserted by section 125 above) insert “ or 3 ”.

(6) Section 413(2) of the Insolvency Act 1986 (rules: duty to consult Insolvency Rules Committee) shall not apply to the first set of rules which is made in reliance on this section.

Fees

161

After section 414(8A) of the Insolvency Act 1986 (fees orders–inserted by section 126 above) insert—

(8B) This section applies in relation to Part 3 of the Banking Act 2009 (bank administration) as in relation to Parts I to VII of this Act.

Evidence

162

In section 433(1) of the Insolvency Act 1986 (admissibility of statements of affairs) after paragraph (aa) (inserted by section 128 above) insert (before the “and”)—

(ab) a statement made in pursuance of a requirement imposed by or under Part 3 of that Act (bank administration),

Partnerships

163

(1) The Lord Chancellor may, by order made with the concurrence of the Secretary of State and the Lord Chief Justice, modify provisions of this Part in their application to partnerships.

(2) For procedural purposes an order under subsection (1) shall be treated in the same way as an order under section 420 of the Insolvency Act 1986 (partnerships).

(3) This section does not apply in relation to partnerships constituted under the law of Scotland.

Scottish partnerships

164

(1) The Secretary of State may by order modify provisions of this Part in their application to partnerships constituted under the law of Scotland.

(2) An order—

(a) shall be made by statutory instrument, and

(b) shall be subject to annulment in pursuance of a resolution of either House of Parliament.

Co-operation between courts

165

(1) Provisions of or by virtue of this Part are “insolvency law” for the purposes of section 426 of the Insolvency Act 1986 (co-operation between courts).

(2) At the end of that section (after the subsection added by section 129) add—

(14) Section 165 of the Banking Act 2009 provides for provisions of that Act about bank administration to be “insolvency law” for the purposes of this section.

Interpretation: general

166

(1) In this Part “the court” means—

(a) in England and Wales, the High Court,

(b) in Scotland, the Court of Session, and

(2) In this Part—

“the FCA” means the Financial Conduct Authority, and

“the PRA” means the Prudential Regulation Authority.

(3) For the purposes of a reference in this Part to inability to pay debts—

(a) a bank that is in default on an obligation to pay a sum due and payable under an agreement, is to be treated as unable to pay its debts, and

(b) section 123 of the Insolvency Act 1986 (inability to pay debts) also applies; and

for the purposes of paragraph (a) “agreement” means an agreement the making or performance of which constitutes or is part of a regulated activity carried on by the bank.

(4) Expressions used in this Part and in the Insolvency Act 1986 have the same meaning as in that Act.

(5) Expressions used in this Part and in the Companies Act 2006 have the same meaning as in that Act.

(6) A reference in this Part to action includes a reference to inaction.

Northern Ireland

167

In the application of this Part to Northern Ireland—

(a) a reference to an enactment is to be treated as a reference to the equivalent enactment having effect in relation to Northern Ireland,

(b) where this Part amends an enactment an equivalent amendment (incorporating any necessary modification) is made to the equivalent enactment having effect in relation to Northern Ireland,

(c) the reference in section 159 to section 31 of the Credit Unions Act 1979 is to be treated as a reference to Article 2 of the Credit Unions (Northern Ireland) Order 1985, and

(d) in section 163—

(i) the reference to the Secretary of State is to be treated as a reference to the Department for Enterprise, Trade and Investment, and

(ii) the reference to the Lord Chief Justice is a reference to the Lord Chief Justice in Northern Ireland.

Consequential provision

168

(1) The Treasury may by order make provision in consequence of this Part.

(2) An order may, in particular, amend or modify the effect of an enactment (including a fiscal enactment) passed before the commencement of this Part.

(3) An order—

(a) shall be made by statutory instrument, and

(b) may not be made unless a draft has been laid before and approved by resolution of each House of Parliament.

Part 4 — Financial Services Compensation Scheme

Overview

169

This Part makes a number of amendments in connection with the Financial Services Compensation Scheme provided for by Part 15 of the Financial Services and Markets Act 2000.

Contingency funding

170

(1) After section 214 of the Financial Services and Markets Act 2000 (compensation scheme: general) insert—

(214A) (1) The Treasury may make regulations (“contingency fund regulations”) permitting the scheme manager to impose levies under section 213 for the purpose of maintaining contingency funds from which possible expenses may be paid. (2) Contingency fund regulations may make provision about the establishment and management of contingency funds; in particular, the regulations may make provision about— (a) the number and size of funds; (b) the circumstances and timing of their establishment; (c) the classes of person from whom contributions to the funds may be levied; (d) the amount and timing of payments into and out of funds (which may include provision for different levies for different classes of person); (e) refunds; (f) the ways in which funds' contents may be invested (including (i) the extent of reliance on section 223A, and (ii) the application of investment income); (g) the purposes for which funds may be applied, but only so as to determine whether a fund is to be used (i) for the payment of compensation, (ii) for the purposes of co-operating with a bank liquidator in accordance with section 99 of the Banking Act 2009, or (iii) for contributions under section 214B; (h) procedures to be followed in connection with funds, including the keeping of records and the provision of information. (3) The compensation scheme may include provision about contingency funds provided that it is not inconsistent with contingency fund regulations.

(2) At the end of section 213(7) (compensation scheme: further provision) add “ (except where limitations are expressly stated) ”.

(3) In section 218 (compensation scheme: annual report)—

(a) in subsection (1) after “to the Authority” insert “ and the Treasury ”, and

(b) at the end of subsection (2)(b) add “ or in contingency fund regulations. ”

Special resolution regime

171

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Investing in National Loans Fund

172

After section 223 of the Financial Services and Markets Act 2000 (management expenses) insert—

(223A) (1) Sums levied for the purpose of maintaining a contingency fund may be paid to the Treasury. (2) The Treasury may receive sums under subsection (1) and may set terms and conditions of receipts. (3) Sums received shall be treated as if raised under section 12 of the National Loans Act 1968 (and shall therefore be invested as part of the National Loans Fund). (4) Interest accruing on the invested sums may be credited to the contingency fund (subject to any terms and conditions set under subsection (2)). (5) The Treasury shall comply with any request of the scheme manager to arrange for the return of sums for the purpose of making payments out of a contingency fund (subject to any terms and conditions set under subsection (2)).

Borrowing from National Loans Fund

173

After section 223A of the Financial Services and Markets Act 2000 (investing in National Loans Fund–inserted by section 172 above) insert—

(223B) (1) The scheme manager may request a loan from the National Loans Fund for the purpose of funding expenses incurred or expected to be incurred under the scheme. (2) The Treasury may arrange for money to be paid out of the National Loans Fund in pursuance of a request under subsection (1). (3) The Treasury shall determine— (a) the rate of interest on a loan, and (b) other terms and conditions. (4) The Treasury may make regulations— (a) about the amounts that may be borrowed under this section; (b) permitting the scheme manager to impose levies under section 213 for the purpose of meeting expenses in connection with loans under this section (and the regulations may have effect despite any provision of this Act); (c) about the classes of person on whom those levies may be imposed; (d) about the amounts and timing of those levies. (5) The compensation scheme may include provision about borrowing under this section provided that it is not inconsistent with regulations under this section.

Procedure for claims

174

(1) After section 214(1) of the Financial Services and Markets Act 2000 (the compensation scheme: powers) insert—

(1A) Rules by virtue of subsection (1)(h) may, in particular, allow the scheme manager to treat persons who are or may be entitled to claim under the scheme as if they had done so. (1B) A reference in any enactment or instrument to a claim or claimant under this Part includes a reference to a deemed claim or claimant in accordance with subsection (1A). (1C) Rules by virtue of subsection (1)(j) may, in particular, allow, or be subject to rules which allow, the scheme manager to settle a class of claim by payment of sums fixed without reference to, or by modification of, the normal rules for calculation of maximum entitlement for individual claims.

(2) In section 417(1) (definitions) at the appropriate place insert—

“claim”, in relation to the Financial Services Compensation Scheme under Part XV, is to be construed in accordance with section 214(1B);

Rights in insolvency

175

(1) This section amends section 215 of the Financial Services and Markets Act 2000 (rights of scheme following insolvency).

(2) For section 215(1) substitute—

(1) The compensation scheme may make provision— (a) about the effect of a payment of compensation under the scheme on rights or obligations arising out of matters in connection with which the compensation was paid; (b) giving the scheme manager a right of recovery in respect of those rights or obligations.

(3) In section 215(2) for “the relevant person's insolvency” substitute “ a person's insolvency ”.

(4) The heading of section 215 becomes “”. “ Rights of the scheme in insolvency ”

Information

176

(1) Before section 219 of the Financial Services and Markets Act 2000 (scheme manager's power to require information) insert—

(218A) (1) The Authority may make rules enabling the Authority to require authorised persons to provide information, which may then be made available to the scheme manager by the Authority. (2) A requirement may be imposed only if the Authority thinks the information is of a kind that may be of use to the scheme manager in connection with functions in respect of the scheme. (3) A requirement under this section may apply— (a) to authorised persons generally or only to specified persons or classes of person; (b) to the provision of information at specified periods, in connection with specified events or in other ways. (4) In addition to requirements under this section, a notice under section 165 may relate to information or documents which the Authority thinks are reasonably required by the scheme manager in connection with the performance of functions in respect of the scheme; and section 165(4) is subject to this subsection. (5) Rules under subsection (1) shall be prepared, made and treated in the same way as (and may be combined with) the Authority's general rules.

(2) Section 219 is amended as follows.

(3) In subsection (1) for “given to the relevant person in respect of whom a claim is made under the scheme or to a person otherwise involved, require that person” substitute “ require a person ”.

(4) After subsection (1) insert—

(1A) A requirement may be imposed only— (a) on a person (P) against whom a claim has been made under the scheme, (b) on a person (P) who is unable or likely to be unable to satisfy claims under the scheme against P, (c) on a person (“the Third Party”) whom the scheme manager thinks was knowingly involved in matters giving rise to a claim against another person (P) under the scheme, or (d) on a person (“the Third Party”) whom the scheme manager thinks was knowingly involved in matters giving rise to the actual or likely inability of another person (P) to satisfy claims under the scheme. (1B) For the purposes of subsection (1A)(b) and (d) whether P is unable or likely to be unable to satisfy claims shall be determined in accordance with provision to be made by the scheme (which may, in particular— (a) apply or replicate, with or without modifications, a provision of an enactment; (b) confer discretion on a specified person).

(5) In subsection (3) for paragraphs (a) and (b) substitute “ to be necessary (or likely to be necessary) for the fair determination of claims which have been or may be made against P ”.

(6) After subsection (3) insert—

(3A) Where a stabilisation power under Part 1 of the Banking Act 2009 has been exercised in respect of a bank, the scheme manager may by notice in writing require the bank or the Bank of England to provide information that the scheme manager requires for the purpose of applying regulations under section 214B(3) above.

(7) In subsection (6) for “the relevant person” substitute “ P ”.

(8) Omit subsection (8).

(9) Omit subsection (10).

Payments in error

177

After section 223B of the Financial Services and Markets Act 2000 (borrowing from National Loans Fund–inserted by section 173 above) insert—

(223C) (1) Payments made by the scheme manager in error may be provided for in setting a levy by virtue of section 213, 214A, 214B or 223B. (2) This section does not apply to payments made in bad faith.

Regulations

178

In section 429(2) of the Financial Services and Markets Act 2000 (parliamentary control of subordinate legislation: affirmative resolution) after “90B” insert “ , 214A, 214B ”.

Delegation of functions

179

(1) Before section 222 of the Financial Services and Markets Act 2000 (scheme manager: statutory immunity) insert—

(221A) (1) The scheme manager may arrange for any of its functions to be discharged on its behalf by another person (a “scheme agent”). (2) Before entering into arrangements the scheme manager must be satisfied that the scheme agent— (a) is competent to discharge the function, and (b) has been given sufficient directions to enable the agent to take any decisions required in the course of exercising the function in accordance with policy determined by the scheme manager. (3) Arrangements may include provision for payments to be made by the scheme manager to the scheme agent (which payments are management expenses of the scheme manager).

(2) In section 222(1) of that Act after “officer” insert “ , scheme agent ”.

Functions under this Act

180

At the end of Part 15 of the Financial Services and Markets Act 2000 add—

(224A) A reference in this Part to functions of the scheme manager (including a reference to functions conferred by or under this Part) includes a reference to functions conferred by or under the Banking Act 2009.

Part 5 — ... Payment Systems and service providers

Introduction

Overview

181

This Part enables the Bank of England to oversee certain systems for transferring money and certain persons who provide services , including in relation to such systems.

Interpretation: “inter-bank payment system”

182

(1) In this Part “... payment system” means arrangements , or proposed arrangements, designed to facilitate or control the transfer of money or digital settlement assets ....

(1A) But “payment system” does not include any arrangements for the physical movement of cash.

(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4) In subsection (1) “money” includes credit.

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